As we reported earlier this week, the U.S. Food and Drug Administration ("FDA") approved the first biosimilar application -- an application by Sandoz to market a biosimilar version of Amgen's NEUPOGEN® (filgrastrim) biologic drug product. This is the first such application to be approved using the new biosimilar pathway created by the Biologics Price Competition and Innovation Act ("BPCIA"). However, whether Sandoz will be able to begin marketing its new drug is in question because the U.S. District Court for the Northern District of California is scheduled to hear arguments related to a motion for preliminary injunction filed by Amgen on Friday, March 13, 2015.
Much like with Hatch-Waxman statute for small-molecule pharmaceuticals, the BPCIA includes both an abbreviated drug approval process and a mechanism by which the parties can address any patent claims while the drug is being approved. However, as we reported earlier this year, Sandoz chose to avail itself of the first part of the statute, thereby reducing the time and cost required to obtain approval or its drug, but it unilaterally chose to forego the second part of the statute and did not supply Amgen with a copy of its biosimilar application. This, of course, thwarted Amgen's ability to avail itself of the statutorily-mandated patent exchanges -- the so-called biosimilar "patent dance." Sandoz also alleged that it provided Amgen with its 180-day notice of commercial marketing, as required by the BPCIA, in July of 2014 before its application was approved. It is unclear, therefore, when Sandoz will actually be able to begin selling its new drug product, or if it does launch at risk, what will happen to the market if Amgen is successful in its current litigation with Sandoz. It is also unclear whether the BPCIA will become a viable mechanism to bring cheaper follow-on drugs to the market if applicants are allowed to unilaterally "opt-out" of this delicately crafted system.
Amgen v. Sandoz
Amgen filed an action in the U.S. District Court for the Northern District of California on October 24, 2014 based on the failure of Sandoz to follow the disclosure procedures set out in the statute. The first cause of action alleged in the complaint was that Sandoz's actions in filing its BLA and plans for launching its biosimilar drug product constituted a violation of California's state law of unfair competition. Specifically, Amgen alleged that Sandoz both (1) used the abbreviated pathway but refused to comply with the statutory requirements of the BPCIA and (2) failed (or will fail to) meet the obligation to provide notice of commercial marketing. Either of these will be the direct cause of economic injury, according to Amgen. Amgen also asserted a cause of action for conversion, which can be simplistically thought of as an allegation of theft, based on Sandoz's use of Amgen's information related to safety, purity, and potency. If Sandoz does not adhere to the patent exchange provisions of the BPCIA, the argument goes, it should not be entitled to rely on the efforts of the reference product sponsor. Finally, Amgen alleged infringement of U.S. Patent No. 6,162,427, but reserved the right to assert additional patents based on information obtained during discovery. Among other things, Amgen is seeking an injunction to prevent Sandoz from marketing ZarxioTM.
Sandoz responded by defending its decision to not participate in the statutory scheme because it did not want to share its BLA or manufacturing process with a future competitor, even though the BPCIA contains confidentiality provisions and limits the ability of recipients to disclosure any obtained information. Specifically, Sandoz alleged that "[p]roviding the biosimilar application to the reference product sponsor is an option, not a requirement." It supported this position by citing to the statutorily-mandated "penalty" for not complying with the disclosure requirements:
If a subsection (k) applicant fails to provide the application and information required under paragraph (2)(A), the reference product sponsor, but not the subsection (k) applicant, may bring an action under section 2201 of Title 28, for a declaration of infringement, validity, or enforceability of any patent that claims the biological product or a use of the biological product.
42 U.S.C. § 262(l)(9)(C). If the disclosure was mandatory, according to Sandoz, this section would be superfluous. Sandoz also contended that it gave Amgen notice of commercial marketing back in July of 2014, and that nothing in the statute required that approval have already been obtained.
After the Answer by Sandoz, Amgen filed a motion for partial judgment under Rule 12(C), or alternatively, for partial summary judgement. The issues that Amgen is seeking to be addressed by this motion are:
(1) whether "provision of the BLA and manufacturing information under subsection 262(l)(2)(A) [is] mandatory, as the statute provides, or optional, as Sandoz contends, and is Sandoz's failure to provide that information while availing itself of the benefits of the abbreviated subsection (k) pathway by reference to Amgen's prior-licensed filgrastim product an unlawful business practice under Cal. Bus. & Prof. Code § 17200 et seq.";
(2) whether Sandoz's notice of commercial marketing given before its filgrastim product is licensed under subsection (k) a breach of 42 U.S.C. § 262(l)(8)(A), and, if so, is that statutory breach an unlawful business practice under Cal. Bus. & Prof. Code § 17200 et seq."; and
(3) whether Sandoz should be allowed to bring counterclaims seeking declaratory judgments of non-infringement and invalidity, even though it failed "to provide the BLA and manufacturing information" to Amgen.
In addition, likely prompted by the imminent approval of the Sandoz application, Amgen filed a motion for a preliminary injunction on February 5, 2015 to prevent Sandoz from entering the market before these issues can be resolved by the Court. In order to determine the appropriateness of a preliminary injunction, a court must weigh four factors: (1) likelihood of success on the ultimate merits of the case, (2) irreparable harm, (3) the public interest, and (4) the balance of equities.
Amgen contended that it will succeed on the merits because Congress set forth mandatory requirements in the BPCIA for biosimilar applicants, and Sandoz blatantly ignored them. Amgen also asserted that the harm it will suffer by Sandoz's failure to provide its application is the type of harm the statute was meant to protect against in the first place: the entry of a biosimilar competitor without the ability to seek an injunction on the full breadth of its patent portfolio. As a result, Amgen alleged that its research and development will suffer, that its new products will be harmed, that the price of its filgrastim products will be permanently and irrevocably eroded, and that it will suffer damages to its customer relationships and loss of goodwill. Finally, Amgen contended that both the public interest will not be served by "permitting lawlessness," and that the balance of equities counsel against allowing Sandoz to ignore the statute.
In response, Sandoz asserted that its actions have been fully consistent with both the text and the purpose behind the BPCIA. It chose to forgo the optional disclosure requirements with full knowledge that it was also giving up the protections afforded by the statute. For example, if Sandoz had participated in the so-called patent dance, it would have been able to limit the number of patents that Amgen could litigation. Instead, Amgen could (and did) immediately bring an infringement action on any patent. Sandoz also contended that any alleged harm that Amgen faces is self-inflicted because Amgen ignored every offer by Sandoz to provide its application, albeit under different terms of confidentiality. Moreover, according to Sandoz, any harm alleged by Amgen was either too speculative or could ultimately be compensated with money damages. Sandoz also argued that the public would be disserved by an injunction because it would be deprived of an alternative to Amgen's filgrastim products. Likewise, Sandoz alleged that the balance of hardships tip in its favor because it will be prevented from launching for another 13 months or longer.
Even though the Court will hear arguments on these issues on March 13, Sandoz has reportedly indicated that it will not launch until the earlier of April 10, 2015, or a favorable ruling on the pending motions. This is, of course, not the first time Sandoz has appeared to sidestep the requirements of the BPCIA. As we reported last year, it attempted to obtain a declaratory judgment action against Amgen prior to filing an application to market a biosimilar version of Enbrel®. The District Court for the Northern District of California dismissed that case on jurisdictional grounds as essentially premature, and the Court of Appeals for the Federal Circuit affirmed. It will be interesting to see if the Court will also thwart Sandoz's current plan of avoiding the patent-exchange provisions of the BPCIA, or whether it will side with Sandoz, thereby paving the way for the commercial marketing of the first approved biosimilar application.
We will continue to monitor this case and report on the outcome of the present motions in a future post.
